MoviePass CEO Wants Moviefone to Be a User-Generated Rotten Tomatoes

The listings site "gives us kind of a running start at building content for our subscribers," says Mitch Lowe.

MoviePass has had a busy few weeks.

The movie ticketing subscription service (owned by Helios and Matheson Analytics) acquired the nearly-three-decades-old movie listing service Moviefone. The company added Landmark Theaters to its subscription services and ended a months-long blackout of AMC Theatres' most popular locations, including several in Los Angeles and New York. (The move was reportedly made after AMC denied MoviePass' request for a $3 price cut on AMC tickets it purchases and a cut of concessions its subscribers purchase. MoviePass CEO Mitch Lowe has said that it barred locations because it wanted to "test" subscribers' buying behavior.)

MoviePass, which has been both lauded and demonized by the those in the industry, also found itself in hot water when Lowe talked about the data that the company pulls from its subscribers at a panel during a March finance forum in Los Angeles. "We watch how you drive from home to the movies. We watch where you go afterwards, and so we know the movies you watch," the exec said at the time.

In a new interview with The Hollywood Reporter, Lowe clarified that stance and elaborated on his plans for Moviefone.

What was the reasoning behind the Moviefone acquisition?

There are a couple of reasons. First, we think that Moviefone was an extremely undervalued asset. It got lost in the AOL empire and suffered from lack of attention.

The second is they already have six to eight million unique users a month, and we of course can grow that many times over and use that as a great funnel to inform people about MoviePass and it can be a great subscriber acquisition asset for us.

Third, more and more we have advertisers, studios and brands that want access to our subscriber base and while we’re building this inventory on our site, there’s a whole lot of inventory there, especially as we get more and more clout in our purchasing. We’re currently buying 6 to 7 percent of movie tickets nationwide. So, studios and distributors are seeing that we’re a great place to promote. It's not because we’re marketing geniuses, it's because it's a lot easier for us to get someone to go to a movie we recommend or we advertise, because the customer has no incremental cost. They want to get value.

Our subscribers are telling us they want to be able to get recommendations or read reviews by MoviePass subscribers. They don't want to go to other sites, they want to have it all in one place. [Moviefone] gives us kind of a running start at building content for our subscribers.

The reviews would be written by your subscribers?

Yes, reviews and recommendations. Today, many people go to Rotten Tomatoes. And we find our subscribers have a slightly different and, in fact, a more positive rating of movies. We want to be able to do our own presentation for our subscribers from fellow MoviePass subscribers that gives them more reflection of people like them, who love movies.

What does the inclusion of Landmark theaters mean for MoviePass?

Our subscribers have been telling us for ages that they want to use [MoviePass] at Landmark, and it is because our subscribers don't use MoviePass to increase the number of times they see Star Wars or Black Panther, they use it to see more of I, Tonya, Lady Bird and exactly the kind of films that are shown at Landmark.

MoviePass has added back 10 popular AMC locations. What was behind that decision?

Out of the 661 AMC theaters that MoviePass was available at, we wanted to understand a few things about our subscribers, so we removed, for a short period of time for a test, 10 of them in order to understand what our subscribers do. Do they cancel their service because that was their favorite theater? Do they go to a competitor like Regal or Cinemark or an independent? And does it decrease their moviegoing?

We found some really fascinating things. One is that, well more than half of our subscribers have found a competitor to go to. They didn’t change their frequency habit. They found an independent or Regal. In fact, we had many theater owners saying, “Please shut off the AMC near me." Some theaters saw a doubling of business in the surrounding area. The second thing we found was the AMC theaters actually decreased their volume during this period by double what we were spending there. And it was because 60 percent of [our subscribers] go with a non-MoviePass friend, and [the subscribers] were the ones that had [a ticket] for free, so they were driving wherever their friend would go. AMC, according to market share reports that we had access to, declined — most of them, not all — double of what we were spending. We tested this, we learned a lot, and then the test was over, so we turned them back on.

You have been outspoken about MoviePass' data collection practices. With what we have seen over the last couple of week with Facebook, what are you doing to ensure your subscribers of their safety?

It’s been a great reminder that companies like ours have to do a lot to ensure privacy and ensure that our terms and conditions are clear and readable. We have initiated a program to start to create films vignettes that explain what our terms and conditions mean in various segments so people don’t have to read the small print. They aren't finished yet, but [the Facebook incident] got us thinking that even if we say it, who reads that stuff? It made us realize we had an obligation to be as clear as possible.

It reminded me to use the proper language to describe what we actually do. I incorrectly used the word “tracking,” when in fact what we do is locate you. How our service works is if you want to find a theater around you, you go to our app and it locates where you are, because you’re asking what are the theaters and movies around me. Then, when you go out of the app, we don’t know where you are, where you go, what you do. The next time we know where you are is when you check into the theater when you’re a hundred yards of the theater. We locate you to confirm you’re at that theater nearby, so we authorize that ticket for you. And what I had implied was that we were tracking you from the time you want to go to the movies to the time you get there and the time afterwards. We don't do that. We only locate you at those two times, when you’re using the app.

What we do want to do is present you with a bunch of offers that are around the theater you’re going to, like a dollar off your Starbucks, or a free appetizer at the restaurant across the street, or babysitting before you go. We don't need to "track" you to know which theater you’re going to because you’ve already told us where you’re going. And then only if you’d opt-in would we present you with offers before or after the movie, based on [your theater location].

Have you been noticing more acceptance in the industry?

Every single week we get more and more positive responses from everyone in the community, whether it's theater owners or distributors or studios. I’d say the studios and distributors are moving the fastest mainly because, in the challenging world where you need a lot of good analysts, many of them have hired analysts from Google and Facebook and others who really see the writing on the wall that MoviePass subscribers are highly energized. They really to want go see films and are more easily convinced to go than someone who has to fork out 10 dollars to do it.